Insurance is a financial protection system that helps reduce the financial impact of unexpected events such as death, serious illness, accident, or medical emergencies. For seafarers, this protection matters because income often depends on remaining medically fit and being able to continue sailing. Even then, many seafarers delay buying term insurance and health insurance because they do not fully understand how these products work or why they may be needed.
Term insurance is a type of life insurance mainly designed to provide financial protection to the family. If the insured seafarer dies during the policy term, the nominee receives the insurance cover according to the policy conditions. Its main purpose is protection, not investment or wealth creation.
Health insurance helps cover eligible medical and hospitalisation expenses according to the terms and conditions of the policy. For seafarers, it can be especially important because a serious illness may create expensive treatment costs and may also affect the ability to return to sea.
One common reason is the belief that nothing serious will happen to them. A young and healthy seafarer may feel physically fit, financially comfortable, and confident about the future. When there has never been a major illness or accident in the family, paying an insurance premium can feel unnecessary and easy to postpone.
The problem is that insurance is meant for events that cannot be predicted. A serious medical condition, accident, or sudden loss of earning ability can happen without much warning. Its purpose is not to predict when something will happen, but to create a financial safety net in case it does.
Another major reason seafarers avoid term insurance is that there is usually no maturity benefit in a basic term plan. Many people feel that if they are paying premiums for years, they should receive some money back. Products that promise a maturity value or return may therefore look more attractive.
This thinking comes from mixing insurance with investment. Insurance is mainly for protection, while investment is meant for wealth creation or returns. If a seafarer pays term insurance premiums for many years and the family never needs to make a claim, that does not mean the money was wasted. It means the protection was never required.
A premium often feels like an expense because the benefit is not visible every year. Someone may pay ₹30,000 or ₹36,000 annually for health insurance and feel that the money has disappeared because no claim was made, especially when other spending gives immediate satisfaction.
The value of insurance becomes clearer when a major problem occurs. If a medical emergency suddenly requires ₹20 lakh, the premiums paid over previous years may look small compared with the amount needed. If the policy is never used, the better way to see it is that the family was fortunate enough to remain healthy.
Many seafarers do not understand insurance well enough. They may have heard about term insurance, medical insurance, endowment plans, ULIPs, or company-provided cover, but may not understand the difference between them. This lack of clarity often leads to delay because people are uncomfortable buying something they do not understand.
The problem becomes bigger when there is no trusted person who understands the lifestyle and documentation needs of seafarers. A normal bank representative or insurance agent may not always understand sailing contracts, medical fitness requirements, or additional questionnaires and disclosures that can apply to mariners.
Seafarers, like many other people, often want a financial return whenever they pay money. If a product promises a maturity amount, bonus, or investment value, it may feel more attractive than a pure protection plan. This is one reason products that combine insurance and investment can look appealing.
The basic principle should remain clear: protection and investment are different goals. When the objective is life protection, the focus should be on whether the cover is adequate for the family. When the objective is investment, returns and time horizon can be considered separately.
Mis-selling is another reason people end up with the wrong insurance or lose trust in insurance later. An agent may recommend a product that looks attractive because it offers some return or maturity value. The customer may also prefer it because getting money back feels more satisfying than paying only for protection.
Problems arise when the product later fails to meet expectations. If someone was promised strong returns and does not receive what they expected, trust can be damaged. A seafarer should therefore understand what problem the product is solving and whether the insurance cover is actually sufficient.
A common reason for avoiding medical insurance is the belief that it can be purchased later. A young Third Officer, Fourth Engineer, Third Engineer, or another junior officer may think that health insurance is only necessary after marriage or after having children. If they are fit and rarely fall sick, the need can appear distant.
However, age alone does not remove medical risk. An accident or serious illness can happen even when a person is young. Understanding health insurance early can help a seafarer become familiar with coverage, premiums, exclusions, and policy conditions before an emergency forces the family to make rushed decisions.
Many seafarers depend entirely on insurance or medical support provided by the shipping company. Company cover can be useful, but it may be linked to the employment contract, the time spent onboard, or a limited period after sign-off. Once the contract ends, the same protection may not continue.
One serious example involved a seafarer who discovered that both kidneys had failed after signing off. The company reportedly refused to continue paying because the condition was identified outside the period for which it considered itself responsible. Situations like this show why personal protection can act as a separate safety net.
Health insurance premiums may appear high, especially when a seafarer looks only at the annual cost. This sometimes leads people to choose the cheapest policy or avoid insurance altogether. The problem is that a low premium is not useful if the policy later creates difficulty during a genuine medical claim.
The decision should not be based only on price. Seafarers should understand the coverage, terms, exclusions, claim process, and whether the policy is suitable for their needs. Paying slightly more for appropriate protection may be better than choosing a cheaper option only to save money.
Insurance documentation can be confusing for seafarers. Questions may arise about occupation, travel history, sailing routes, medical details, and whether a mariner or travel questionnaire is required. If different agents give different answers, confidence in the process quickly falls.
This confusion also creates fear that a wrong disclosure could cause trouble later. A seafarer may worry that a policy or claim could face problems because something was not explained correctly at the beginning. Clear guidance and honest disclosure are therefore important.
Another reason is short-term thinking. People naturally focus on things that give an immediate result, such as investment returns, purchases, or lifestyle upgrades. Insurance does not give the same visible reward, so it can remain low on the priority list for years.
Protection works differently. Its value lies in being available before a problem occurs. Waiting until a serious diagnosis, accident, or family responsibility appears can make the decision much harder. The goal should be to understand insurance while life is stable.
Seafarers often avoid term insurance and health insurance because of low awareness, preference for returns, dependence on company cover, confusing paperwork, mis-selling, high premiums, and the belief that nothing serious will happen. Understanding these reasons is the first step toward making better financial decisions.
Term insurance and health insurance should be seen mainly as protection. A seafarer should learn how coverage works, compare options carefully, disclose information honestly, and choose protection according to personal and family needs. To make financial planning and career management more organised, seafarers can also explore Sailor Pro app, a platform built to support seafarers with practical tools and guidance for their professional and financial journey.
Many seafarers avoid term insurance because it does not usually provide a maturity benefit, premiums may feel like wasted money, and some people believe nothing serious will happen to them. Low awareness and confusion between insurance and investment can also contribute to the delay.
Term insurance is designed primarily to provide financial protection to dependants if the insured person dies during the policy period, subject to policy terms. It can be especially relevant when the family depends heavily on the seafarer’s income.
Young seafarers may feel that they are healthy and unlikely to need medical treatment. They may also plan to buy insurance only after marriage or having children. However, accidents and serious illnesses cannot always be predicted.
Company medical support can be useful, but its availability may depend on the employment contract, onboard period, and conditions after sign-off. Personal health insurance can provide a separate layer of protection that is not completely dependent on employment.
Insurance premiums pay for financial protection against covered risks. If a person never needs to make a claim, it does not mean the protection was useless. It means the insured event did not occur during that period.
Price should not be the only factor. Seafarers should understand the policy coverage, exclusions, conditions, claim process, and suitability before choosing health insurance.
Insurance is primarily meant to protect against financial risks, while investment is generally focused on building wealth or generating returns. Keeping these objectives separate can make financial planning easier to understand.
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